PREPARED BY: MATT RODRIGUEZ DATE MEETING: 06/17/2024
SUBJECT:
TITLE
CONSIDER RECEIVING AND ACCEPTING THE INDEPENDENT CITIZENS’ OVERSIGHT COMMITTEE REPORTS FOR PERIOD ENDING JUNE 30, 2023 FOR MEASURE S (FORMERLY MEASURE Q) AND MEASURE K TRANSACTION & USE SALES TAX.
CEQA: This proposed action is not a project as defined by CEQA.
Label
CITY MANAGER RECOMMENDATION
Recommendation
Receive and File Report by Minute Action
Body
Compliance statements
Diversify Revenue Stream (CM, CED & EDC) and Create a Sustainable Economic Ecosystem (CM, CED & EDC) are adopted policy goals under the FY 2023-25 Council Priority Workplan, effective May 1, 2023.
CEQA Compliance Statement
This is not a project as defined by CEQA as a budget or financing mechanism pursuant to 14 Cal. Code of Regulations section 15378(b)
BACKGROUND
Following adoption by the City Council of Ordinance No. 2012-005, local San Pablo voters passed the Measure Q Sales Tax on June 5, 2012 (73.56%), to provide additional funding for general municipal services, including the following: Public Safety (especially gang prevention); job training for local residents (especially youth and the disenfranchised); and youth services. In addition, following adoption by the City Council of Ordinance No. 2014-007, local San Pablo voters passed the Measure K Sales Tax on June 3, 2014 (70.80%), to provide specific funding for an Emergency Medical Services (EMS) and Squad at ConFire Station No. 70 in San Pablo. Pursuant to Measures Q and K voter requirements, the City Council appointed representatives of San Pablo businesses and residents to serve on an Independent Citizens’ Oversight Committee (Committee) to monitor and review each local sales tax measure’s expenses each year respectively.
On November 3, 2020, following adoption by the City Council of Ordinance No. 2020-009, local San Pablo voters approved the Measure S Sales Tax (79.19%) to extend the same local sales tax funding previously passed under Measure Q in 2012 following its sunset on September 30, 2022, for the next ten (10) year funding cycle beginning October 1, 2022 through September 30, 2032.
Annual Independent Citizens Committee Review
As required by each adopted Ordinance, the Citizens Committee (Committee) holds an annual publicly noticed meeting to review the necessary reports for the preceding fiscal year period ending June 30th. Reports were scheduled for Committee review for period ending June 30, 2023 on May 25, 2024. However, due to lack of quorum, the Committee Review had to be rescheduled to June 12, 2024 which was publicly noticed.
A Summary of the Reports for period ending June 30, 2023 including the following:
1) Measure S and Measure K Local Sales Tax Measure Reports:
• Independent Accountant’s Report: The City engaged its independent auditor, Maze & Associates, to review and report on the collection, management, and expenditure of revenues collected by each measure for the fiscal year ended June 30, 2023. During FY 2022-23, the City’s independent auditor finalized each measure’s separate report, which describes the auditor’s findings as it relates to the agreed upon procedures for each respective sales tax measure (See Attachments #1 and #2: Audit Reports from Maze and Associates).
• FY 2022-23 Measure S & Measure K Expenses: Overall, all the total Measure S and Measure K local sales tax revenues and expenditures were reported to the Committee, as follows:
|
Report Period Ending June 30, 2023 |
Measure S |
Measure K |
|
Budgeted Revenues |
$1,767,915 |
$1,000,000 |
|
Actual Revenues |
$1,514,786 |
$1,037,852 |
|
Actual Expenditures |
$1,115,107 |
$1,700,003 |
|
Over/(Under) |
= $399,679 |
= (662,151) |
Note: The Measure S General Fund (GF) revenue receipts exceeded actual MS GF expenditures which overfunded the City’s GF programs and activities due to an anticipated increase in overall Measure S sales tax revenue established at a ½ cent, effective October 1, 2022, and concluding for period ending June 30, 2023. Additionally, the San Pablo Police Department (SPPD) received a FY 2022-23 Measure S budget allocation of $276,957 to support gang and violence prevention programs which was not reflected in the annual audit reports completed by Maze & Associates. However, all eligible SPPD Cadets and JEWL officer expense programs were implemented successfully, with all expenses covered by the City’s GF Operating Budget rather than MS funding allocation for reporting period ending June 30, 2023. As a result, all MS GF program expenditures in SPPD will be reflected more accurately in the FY 2023-24 reporting period.
For Measure K GF revenue receipts, there was insufficient revenue receipts to cover all GF anticipated program expenditures associated with the FY 2022-23 Contra Costa County Fire Protection District (ConFire) EMS Services Agreement which totaled $1.69M resulting in a GF shortfall (or subsidy) for period ending June 30, 2023.
As a result, all expenditure programs and activities funded by Measures S and K sales tax measures were expended in accordance with local voters for the FY 2022-23 period, and during the anticipated sales tax measure transitional period due to the previous Measure Q ¼ cent sales tax revenue ending on September 30, 2022.
• Program Evaluation Presentation: The Committee reviewed annual program evaluation presentations for each sales tax measure based on reports produced by Public Profit, the City’s program evaluator. Using Maze & Associate’s audited figures, the reports reflect revenues collected and funds spent in support of programs and services made possible by Measures S and K. The reports also presented statistical data that represents the positive impact that each measure had on designated target areas for FY 2022-23 period (See Attachments #3 and #4: Measure S and Measure K for FY 2022-23 Annual Reports; and Attachments #5 and #6: Citizens’ Oversight Committee PowerPoint Presentations).
Several testimonials were presented for Measure S that made a powerful statement on the impact of City and SPEDC programs in the lives of local businesses and residents. The value of Measure K funding was equally impressive in the total number of service calls to which EMS Squad 70 responded during the 2022-23 period: 3,424 EMS Squad service calls, 1,151 fire condition calls, 297 EMS rescue calls, and 147 fire hazard calls for an overall total of 4,737 annual service call responses from Fire Station No.70, located in San Pablo.
2) Compliance and Review Statement for Period Ending June 30, 2023
As required by local voters under both sales tax measures, once Committee members completed their annual review of all program data and audited financial reports for period ending June 30, 2023, they must take official action to certify that all Measure S and Measure K Transaction and Use Tax-related program revenues and expenditures for the FY 2022-23 period were utilized in accordance with the official ballot language as adopted by the local electorate and in compliance with adopted Sales Tax Ordinances of the San Pablo City Council (i.e. Ordinance No. #2014-007 for Measure K; #2020-009 for Measure Q).
Following Committee Review, the Committee may make recommendations to the City Council on future programming of Measure S and K budgetary expenditures for future Council consideration (See Attachments #7 and #8: 2022-23 Compliance and Review Statements).
No further recommendations were made by the Committee following their annual review on June 12, 2024.
Therefore, the City Manager is recommending the City Council acknowledge and certify the Committee Compliance Statements recognizing the Independent Citizens’ Review of all Measure S and Measure K related expenses for the period ending June 30, 2023.
FISCAL IMPACT
This report is for informational purposes only and has no fiscal impact on the City.
ATTACHMENTS:
Att A - 2022-23 Independent Accountant’s Report on Measure S by Maze and Associates
Att B - 2022-23 Independent Accountant’s Report on Measure K by Maze and Associates
Att C - 2022-23 Measure Q Program Evaluation Report by Public Profit
Att D - 2022-23 Measure K Program Evaluation Report by Public Profit
Att E - Citizens’ Oversight Committee PowerPoint Summary, Measure S for FY 2022-23
Att F - Citizens’ Oversight Committee PowerPoint Summary, Measure K for FY 2022-23
Att G - Measure S 2022-23 Compliance and Review Statement (June 12, 2024)
Att H - Measure K 2022-23 Compliance and Review Statement (June 12, 2024)